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FOREIGN DIRECT INVESTMENT (FDI) in Malaysia: SETTING UP OF MANUFACTURING BUSINESS IN MALAYSIA (PART 2)

FOREIGN DIRECT INVESTMENT (FDI) in Malaysia: SETTING UP OF MANUFACTURING BUSINESS IN MALAYSIA (PART 2)

MANUFACTURING LICENSE APPLICATION – GOVERNMENT’S GUIDELINES REQUIREMENT

The Malaysian Government’s guidelines for approval of industrial/manufacturing projects in Malaysia are based on the Capital Investment Per Employee (C/E) Ratio. Projects with a C/E Ratio of less than RM55,000 are categorised as labour-intensive and thus will not qualify for a manufacturing licence or for tax incentives. Nevertheless, a project will be exempted from the above guidelines if it fulfils one of the following criteria:

(a)  The value-added is 30% or more; or

(b)  The Managerial, Technical and Supervisory (MTS) Index is 15% or more; or

(c)      The project undertakes promoted activities or manufacture products as listed in the List of Promoted Activities and Products – High Technology Companies (Please refer to Part 3 of this Article); or

(d)      It is located in the promoted areas i.e the States of Sabah, Sarawak, Perlis and the designated Eastern Corridor of Peninsular Malaysia (the states of Kelantan, Terengganu, Pahang and the district of Mersing in the State of Johor); or

(e)      Existing companies (formerly exempted) applying for a manufacturing licence.

For consultation on the issue of foreign investment in Malaysia, please proceed to send in your enquiry by clicking here.

By : L Y Lu & Co.